Remedy for insurers' actions that resulted in racketeeringallegations
Filed June 19, 2006)
United States District Court for the Southern District of Florida Miami Division
Master File No. 00-1334-MD-Moreno
(U.S. District Judge Federico Moreno)
IN RE: MANAGED CARE LITIGATION
Order Granting Summary Judgment in Favor of Remaining Defendants United and Coventry on All Claims
Presently before the Court is the Omnibus Motion for Summary Judgment (D.E.No. 3922) filed by Defendants United Healthcare, Inc., United Health Group, Inc. (collectively, “United”) and Coventry Health Care, Inc. Since the Defendants filed their motion for summary judgment, the Court has provided the Plaintiffs with multiple opportunities to demonstrate a triable issue of fact regarding whether the Defendants conspired to defraud doctors by manipulating their claims processing systems. The Plaintiffs and Defendants have filed numerous briefs regarding conspiracy, and the Court has heard oral argument several times, most recently on March 14, 2006. As explained below, because no reasonable juror could return a verdict in the Plaintiffs’ favor, the Defendants’ motion for summary judgment is GRANTED as to all remaining claims.
In granting judgment in favor of the remaining defendants, this court is reminded of the Eleventh Circuit’s opinion affirming class certification in this very case. See Klay v. Humana, Inc., 382 F.3d 1242 (11th Cir. 2004).
The appellate court indicated that “(i)t would be unjust to allow corporations to engage in rampant and systemic wrongdoing, and then allow them to avoid a class action because the consequences of being held accountable for their misdeeds would be financially ruinous.” Klay, 382 F.3d at 1274. As such, based on the allegations of conspiracy with each other to program their computer systems to systematically underpay physicians for their services, the class was certified. After reviewing thousands of documents, there simply is insufficient evidence of the wrongdoing claimed - i.e. agreeing with their competitors to defraud doctors. The evidence submitted here falls short of that needed to trigger the Racketeer Influenced and Corrupt Organizations Act’s remedial scheme described as “the litigation equivalent of a thermonuclear device.” See Miranda v. Ponce Federal Bank, 948 F.2d 41, 44 (1st Cir. 1991). In so holding, the Court is not giving its imprimatur to the Defendants’ actions or to the tremendous amounts of compensation received by their executives, described by some as exorbitant. But any reform related to executive compensation or individual practices by health maintenance organizations is beyond the power of this court. Those desiring changes in the way health care is provided in America must either look for remedies before Congress or allow the free market to dictate the results.
http://www.flsd.uscourts.gov/default.asp?file=cases/index.html (Under “00-MD-1334-MORENO-In Re Managed Care Litigation” click “”Order granting summary judgment in favor of remaining defendants United and Coventry on all claims”)
Comment:
By Don McCanne, M.D.
Although this insurance company racketeering lawsuit was dismissed because of the failure of the plaintiffs to demonstrate a joint conspiracy between the insurers, Judge Moreno did not rule that the insurers were blameless. In fact, he specifically stated that “the Court is not giving its imprimatur to the Defendants’ actions.” If the insurers had done no wrong, it is unlikely that the other defendant companies would have previously settled. These included, alphabetically, Aetna, Anthem Blue Cross Blue Shield, Cigna, Health Net, Humana, Prudential Financial Services, and WellPoint Health Networks (though PacifiCare Health Systems also escaped by holding out for a summary judgment).
The primary allegation was that the insurers used claims processing software that was designed to reduce or deny payment to physicians for legitimate services provided and billed, using agreed-upon, standard CPT coding.
Physicians understandably felt that they were being cheated, and were particularly incensed by the outrageous executive compensation being granted with what seemed to be funds that rightfully belonged to the physicians.
(The reality of stock options is another story that won’t be covered here.)
In my opinion, the actions of the insurers were blatantly dishonest and should disqualify them from their role as managers of our health care funds.
Leaving crooks in charge merely because they manage to barely fall short of being criminals is not sound policy.
Judge Moreno states that, if we desire change, we should look to Congress or the free market. By continuing to leave control in the hands of private insurers, we have already selected the market approach. In the face of overwhelming evidence that this distorted market is not working to the benefit of patients or providers, we continue to do nothing. Well, we do something. Some of us whine. Some of us pay more. Some of us die!
Congress must provide us with the remedy. We desperately need a publicly-funded and publicly-administered program of national health insurance.